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        Case ID :

        1927 (2) TMI 13 - HC - Indian Laws

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        Equitable relief against forfeiture under rent default clauses survives a contractual further-payment period and concurrent discretion was upheld. Relief against forfeiture for non-payment of rent remains an equitable discretion under Section 114 of the Transfer of Property Act, and a contractual ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                          Provisions expressly mentioned in the judgment/order text.

                              Equitable relief against forfeiture under rent default clauses survives a contractual further-payment period and concurrent discretion was upheld.

                              Relief against forfeiture for non-payment of rent remains an equitable discretion under Section 114 of the Transfer of Property Act, and a contractual clause allowing payment after the due date with interest does not by itself bar that relief. The court treated the further-payment period as part of the bargain, not as an automatic exclusion of the power to relieve forfeiture. Where the courts below had concurrently granted relief on the facts, appellate interference was warranted only on proof of caprice or error of principle; none was shown. The tenant's entitlement to equitable relief was therefore upheld and the concurrent orders were left undisturbed.




                              Issues: (i) Whether the tenant was disentitled to relief against forfeiture merely because the lease allowed a further period for payment after the due date. (ii) Whether the appellate Court should interfere with the concurrent exercise of discretion by the Courts below granting relief against forfeiture.

                              Issue (i): Whether the tenant was disentitled to relief against forfeiture merely because the lease allowed a further period for payment after the due date.

                              Analysis: The clause providing for payment after the due date with interest and forfeiture on continued default was treated as part of the bargain and not as an automatic bar to equitable relief. The period allowed after the due date was not treated as true "days of grace" excluding the Court's power to relieve against forfeiture. Section 114 of the Transfer of Property Act was applied as embodying the equitable principle that forfeiture for non-payment of rent is penal in nature and relief depends on the circumstances of the case.

                              Conclusion: The tenant was not barred from seeking relief against forfeiture merely because the lease allowed a further period for payment.

                              Issue (ii): Whether the appellate Court should interfere with the concurrent exercise of discretion by the Courts below granting relief against forfeiture.

                              Analysis: Relief against forfeiture was held to depend on the facts of each case and on a judicial exercise of discretion. Since both Courts below had exercised discretion in favour of the tenant, interference in appeal was warranted only if that discretion had been exercised capriciously or on wrong principles. No such infirmity was established on the record.

                              Conclusion: The appellate Court should not interfere with the concurrent discretionary relief granted by the Courts below.

                              Final Conclusion: The appeal failed because the tenant remained entitled to equitable relief against forfeiture and the concurrent discretionary orders in his favour were left undisturbed.

                              Ratio Decidendi: Relief against forfeiture for non-payment of rent is a matter of equitable discretion under Section 114 of the Transfer of Property Act, and the existence of a contractual period for further payment does not by itself exclude that relief.


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                              ActsIncome Tax
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